Figuring out how to save for a house in Australia‘s cooked market is something that could easily keep you up at night, and if it does, then you’re not alone on that front by any means. P.TV‘s ‘What Happens When The Great Australian Dream Dies‘ Youth Research Report released in 2016 actually found that 70% of us don’t think we’ll ever own a home. That’s a fat chunk of us entirely succumbing to the fact that we’ll be renters until we kick the bucket.
Does this cynicism have any merit? Of course it does. Coverage surrounding housing affordability has been in a perpetual doomsday state for yonks now. Where there’s smoke, there’s fire – and if the smoke’s looking like negative gearing and housing bubbles, then thank fuck we’re getting the education necessary to navigate our futures. These crippling economic forces combined with aggressively shit leadership (read: our Turnbull‘s ‘just borrow it from ya ‘rents, ay’ solution) means you’ve earned the right to have a sour outlook at the whole situation.
Okay, so the odds seem insurmountable. But is it impossible? Like, legit not an idea you should entertain even for just a second? And if it is, what are your options when it comes to figuring out how to save for a house?
“For many people living in Sydney (and, to an extent, Melbourne), cracking into the housing market is close to impossible,” says media professional Mark Henderson. Henderson and his wife were able to purchase their Gold Coast home when he was 28. A year on, he shares that they have quite a few friends and family who managed to purchase property in the area as well.
“For people aged 30 and under living in Sydney, they resign themselves to the fact they may never own a home, and if they are able to afford something, it will be in the future.”
This raises the idea that location is one of the biggest barriers to homeownership, especially for those in NSW and VIC. In terms of the feasibility of owning your own place while, y’know, existing, it might be a better idea to look elsewhere for a place with the idea of leveraging it as an investment.
This is how Daniel Walsh decided to tackle it – selling most of his belongings and snapping up his first place at just 19. Now 27, Walsh has eight properties under his belt, which are collectively worth over $3 million dollars. Off the back of this success, he’s started his own buying agency called Your Property Your Wealth.
“We focus on buying affordable properties all around Australia – generally we purchase properties from $180,000 up to $450,000,” he says. “Millennials, now more than ever, need to adopt a new strategy.”
His answer, which has become the ethos of his agency, is ‘rentvesting’.
“This is renting where you want to live, and buying affordable properties around Australia with upside potential for growth.”
Yep, creating an income stream from several rental properties to cover most (if not all) of your dream abode’s rent is idealistic, but it’s a complicated process (hence why agencies like Walsh’s exist) with its own set of barriers to overcome. That being said, it’s an option to keep in mind if you do end up assessing how to save for a house.
IT professional Steven Lopez went down the more traditional path, purchasing an apartment at 23 and his second property at 27 by making sacrifices so he could save.
“I was renting from 20 onwards and had no financial assistance from family to do it,” he says. “I had zero assets to start with except my car, which I had paid off before taking on more debt. I never used credit cards either.”
“Being realistic is key. If you’re paying a lot of rent weekly you need to minimise the expenses by getting roommates or decreasing your lifestyle (not going out as often, only eating noodles, definitely no travel) but once you break in to the market – you should find it very easy to increase your quality of life if your repayments are reasonable.”
He does admit, however, that times have changed since he broke into the market.
“It’s tough now though. If I had to start over, I’d say it would be even harder – but still not impossible.”
But for those who have people leaning on them, figuring out how to save for a house while keeping their heads above water mightn’t be feasible in the slightest.
“Unfortunately, if you have dependents like children, I’m afraid you’re pretty screwed. I have not met a millennial or Gen Y who has managed to have kids and buy a home at the same time – or buy a home later without some sort of established base to start with. It’s quite sad when you think about it because it’s a sacrifice people shouldn’t have to make.”
All-in-all folks, there’s no black and white answer to whether it is/isn’t possible to own your own place while renting. Hopefully, however, you’ve picked up a few ideas on how to save for a house from those who already have – regardless of whether it ends up being an investment in a different state, an apartment you rent out a room in, or something you never end up having a crack at.
If you do go down this road, then you’ll need to start seriously pinching pennies – and a good place to start is by making sure you’re not paying more than you should for everyday expenses. Powershop, for instance, gives other electricity providers a serious run for their money. If you’re keen to shave off expenditure from your bills then click HERE and see what they can suss out for you.
